A look at where partnering can help in the creation of new Internet based trading relationships Partnering facilitates B2B realisation

Unless you are in the field of developing ‘IT’ systems and hardware the technology and capability is purely a tool to support business goals. It is true to say that more recent developments in the area of digital and Internet functionality are revolutionary. The effective targeting of the applications can provide new and innovative ways of creating and executing novel value propositions.

As with any new approach, however, there is often a lapse between the concept and the development of the infrastructure to support it. We have seen already the issues emerging around domain names. Beyond this first wave of administrative problems there are many more that must be resolved. The long-term failure of governments to grasp these nettles will negate the dreams of those who had the vision to give birth to the capability.

For many companies the advent of the web offered a completely new slant on business opportunities. Small companies can now stand side by side with mega corporations and to the user appear equal or often more enticing. This is particularly true in the global arena where from both a buy and sell perspective the small guy has effectively the same degree of access.

The issues though for all sizes of company are the same. Since there is no common set of rules which enable the process of trading. For example companies of all sizes have open access to both new customer markets as well as supply opportunities. They must though still understand who they are dealing with.

It would not be unreasonable for most Internet user to consider purchasing a book or CD from the net. Irrespective of knowing the sellers credibility or background. Would the same people use the web to purchase life saving drugs for their family from those same unknown organisations? I would posture they would not and the reason is one of trust.

Without an element of trust and understanding few business ventures would succeed except those pander to pure greed. Those I would suggest do not often survive for long. Therefore if we are to see the true exploitation of web business we need to establish infrastructure needed to engender real business. Unfortunately this will take time and may never become a reality.

In the meantime organisations quite rightly want to move forward, and gain advantage now. This opens up a whole vista of potential risks that must be addressed. Now companies across the globe have the opportunity to enjoy and exploit virtual relationships. These in some cases may place outside organisations squarely within your supply network. Capitalising on the opportunity means placing your performance in the hands of others. They may be the face the customers see and thus satisfaction depends on them as much as prime supplier. If they do not share your vision, objectives and ethos, then whom will the customer challenge.

This was very much the case when outsourcing became vogue. It made sense to concentrate on core competencies but created an increased risk of failure at many levels. Partnering was first seen as a means to drive cost out of the supply chain by reducing expenditure on common areas and overlaps. As it concept evolved it was seen to address more than simple cost issues. PSL is a joint CBI/DTI initiative to aid the development of increased competitiveness for UK industry. It has developed a wide experience in portfolio in supporting this drive across industry.

Started in 1990 PSL has worked with many organisations to improve the value proposition being put forward. These same concepts are equally if not more pertinent to today’s challenges. Working with tools that are designed to find the best configuration of processes and culture to deliver the objectives of all parties. In the integrated Internet trading environment companies need to understand how they can work together. Which as most will appreciate is not simply a contractual relationship.

Relationship management is often being quoted today but is perhaps not really understood. With web communication for example mass information spreads more rapidly than ever before, between individuals and pressure groups. Imagine therefore a supplier or service provider in your global supply chain that is discovered to be utilising child labour or polluting the environment. Clearly you can react quickly to sever the links, if it impacts your business, but the damage may already be done.

Integrating businesses is not simply about process and cost. It also may have a serious social and therefore profit focused impact. Recognising the premise that all websites can be front companies would clearly not be a basis for integrated trade .The structure and principles behind them may be a very different thing. In the same vein you would not expect to have an open flow of information across the web, without first establishing a sound relationship.

It is in this enviroment that PSL believe the partnering concept can deliver a sound basis for establishing interactive trade relationships. Thus exploiting not simply the cost reduction and supply propositions but ensuring that these networks operate to the common good of the parties involved.

Once these principles have been established then many of the other issues such as legal and finacial frameworks can be developed. PSL has experienced in the non-internet world the differences that have existed between a perceived partnering relationship and the realty. Organisations believing that they have a sound basis for drawing the new technology into their relationships may find new risks they never anticipated.

Partnering moves beyond the contractual relationship into the common aims and objectives. At the same time it addresses the cultural ethos of the prospective partners. Given the challenge to harness the Internet it would makes sense not simply to address the technology but also to look hard at the alliances that will deliver the proposition.